Marketwire

Selling cheap
Valuations seem to have reached a low of 2008-09 once again and
considering the current levels of the market, its quite astonishing
By Research Desk | Sep 6, 2013
The Indian stock market crrently seems to !e nder"aled, e"en more than the !ad
times o# 200$%0&' The BS(%)00 inde*, +hich represents more than &0 per cent o# the
Indian stock market, is trading at a price to !ook "ale o# 2'2 +hich is ,st 1) per cent
a!o"e the lo+ o# 1'& dring the crisis o# 200$%0&' -t o# the )00 companies on the
inde*, 1&. are trading !elo+ their !ook "ale' This is signi#icantly higher considering the
crrent le"el o# the market +hich is the highest nm!er at this le"el o# the inde* /as
Stock Analyst Choice
0 strong !acking
Indraprastha as will !enefit from competitive prices, wide distri!ution
network and e"pertise from its parent companies
By 1arn 2ha!!a | Sep 6, 2013
Incorporated in 1&&$ throgh a ,oint "entre !et+een 30I4, Bharat 5etrolem and the
Delhi 3o"ernment, Indraprastha 3as 4imited /I346 is engaged in retail gas distri!tion
!siness #or spply o# 273 to transport sector and 573 to domestic, indstrial and
commercial sectors in Delhi and 7ational 2apital Region' It is also engaged in the
man#actre o# 273' 2rrently, I34 has 2&0 273 stations, o"er 3,&0,000 residential
cstomers, &22 commercial cstomers and 801 indstrial cstomers'
Strengths
0 gas prchase agreement +ith its promoter, 30I4, ensres a constant spply o# gas at
competiti"e prices that is essential #or the gro+th o# the company' This agreement also
ensres priority spply o# gas in case o# any disrption in spply'
* 9irm allocation o# gas #or the region allo+s I34 to sell 273 at one o# the lo+est retail
price in the contry and still protect its margins
* The company does not ha"e any competition and en,oys a premim position in the
region it operates in' It is the sole spplier o# 273 and 573 in Delhi, 7oida, 3reater
7oida and 3ha:ia!ad, and plans to promote +ider sage o# gas #or "arios applications
throgh co%generation, gas geysers, gensets, etc'
* The price di##erence !et+een 273 and petrol +ill contine to dri"e the large scale
con"ersion o# petrol%dri"en "ehicles to 273 mode' 0s o# no+, 273 o##ers arond 11%1)
per cent sa"ings o"er other #els, ths making it a pre#erred choice
* 9rther, more and more atomo!ile companies are introdcing 273 "ariants +ith
pre%#itted kits to tap the gro+th opportnity +hich is !ond to increase the demand #or
273
* 573 is emerging as a key sorce o# energy #or commercial and indstrial sage' ;ith
increasing prices o# 453 and restrictions on the nm!er o# cylinders, more and more
hoseholds are no+ keen to shi#t on to 573' This pro"ides ample opportnity #or I34 in
#tre
Growth drivers
I34 has a ro!st in#rastrctre o# 273 stations and pipeline net+orks that ensres easy
a"aila!ility to its cstomers' The company has already sho+n its e*pertise in de"eloping
and rolling ot city gas distri!tion net+orks in 72R and this gi"es it an edge to tap any
#rther gro+th opportnities in ne+er areas'
* I34 has a long%term gas sale contract +ith its largest cstomer Delhi Transport
2orporation, +hich acconts #or nearly 20 per cent o# I34<s sales
* The company is also !ond to !ene#it #rom the Delhi 3o"ernment<s initiati"e to
e*pand the city<s p!lic transport system' =ore than ),000 !ses and 8),000
atoricksha+s are e*pected to !e added !y 201)%16
To redce the !rden o# the rise in 05= prices, I34 is all set to increase the price o#
273 !y R10%11 per kg !y =arch 2018' The state go"ernment too is spporti"e and has
not inter"ened in the company<s pricing decision' This increase shold impro"e its
margins that ha"e !een nder pressre o# late' Despite the price rise, I34 shold still
contine to sell gas cheaper than any other state
* 0part #rom the crrent areas o# operations, I34 is also targeting indstrial and
commercial segment #or #rther e*panding its 573 net+ork
* R473 prices are at its peak' 0ny #rther correction in the prices or crrency
appreciation +ill make 573 competiti"e as compared to #rnace oil
Financials
273 is the ma,or component that contri!tes to I34<s re"ene %% .) per cent' ;hile
indstrial segment /1) per cent6 and domestic 573 /10 per cent6 make p #or the rest' It
reported a net sales o#R3,36) crore #or 9>13, a 38 per cent increase #rom last year o+ing
to a strong market presence and a good distri!tion net+ork'
?o+e"er, net pro#it only gre+ at 16 per cent y%o%y de to increase in ra+ material costs'
The company<s de!t as #or 9>13 stands atR303 crore, do+n 18') per cent compared to
last year<s de!t o# R38. crore' Its de!t to e@ity stands at 0'88'
Valuations
0t the crrent price o# 2$1, the stock is trading at a price to earnings o# 11'12 +hich is at
28 per cent discont to its )%year a"erage price to earnings o# 13'$3' 5rice to !ook "ale
to stands at 2'68, lo+er than the )%year a"erage o# 3'88' Re"enes and pro#its ha"e
gro+n at 203R o# 32'2. per cent and 1.'3 per cent' 1olmes might !e nder pressre as
o# no+ !t I34<s a!ility to maintain gross spreads in a!solte terms, copled +ith
decent "olme gro+th, +ill dri"e re"ene and pro#it gro+th'
e"ident #rom the graph
!elo+ and the highlighted
line representing the
crrent le"el6'
#lick the image to e"pand$
Equity Student
6 hours ago

The +rite%p has not toched pon the DamocleAs S+ord hanging o"er the heads o# all
listedBnlisted 23D entities in the contryC the reglatory o"erhang' 0 rnning !attle is on
!et+een I34 and 573RB and the Spreme 2ort is yet to gi"e its #inal "erdict' =y sincere
ad"ice to all potential in"estors in this other+ise one%o#%its kind 23D player, +hose sccess
+old !e di##iclt to replicate in other parts o# the contry, is to +ait #or the ,dgment
!e#ore making the mo"e'
Interview
0 3ood Time to In"est
Vina% &aharia of 'eligare Invesco shares his investment philosoph% and the
rationale !ehind his picks
By 1arn 2ha!!a | 0g 2&, 2013
1inay 5aharia, 9nd =anager, Religare In"esco =tal 9nd, shares his in"estment
philosophy and the rationale !ehind his picks' ?e e*plains +hy the mid% and small%cap
space is still attracti"e and ho+ in"estors shold approach in the crrent scenario'
Your funds Religare Invesco Mid Cap and Religare Invesco Mid N Small
Cap have performed etter than the categor!" #hich stoc$s or strateg!
would !ou attriute to this and the rationale ehind those pic$s%
-r strategy is consistent %% +e #ollo+ a !ottom%p in"estment approach' The retrns
are a #nction o# the stocks +e o+n !t the identi#ication o# stocks and consistency is a
reslt o# the in"estment process' Dsing or in"estment process +e identi#y companies
+ith !etter gro+th tra,ectory and healthy capital retrn ratios' These #orm the core o#
the port#olio +hich has a gro+th !ias'
#hat is !our investment philosoph!% &re there an! sectors !ou prefer
investing in and what do !ou generall! avoid%
;e only in"est in companies that meet the stock selection principles as laid ot in or
in"estment process' ;e look at !oth @alitati"e and @antitati"e #actors' 0 key
@antitati"e parameter +hich +e tend to #ollo+ is retrn on capital' ;e tend to !y into
companies +hich ha"e demonstrated long%term retrn on capital signi#icantly higher
than the cost o# capital +hich +e internally ha"e set at 1) per cent' To that e*tent, +e
emphasise more on historical per#ormance and less on #orecasts' -# corse, +e do look
at the #tre i# +e think that the #tre is going to !e materially di##erent than the past
and there is potential #or change' Bt or process and e*perience emphasise on the #act
that history pro"ides s "ala!le insight +hich #rther helps s a"oid or redce
mistakes'
Secondly, a corollary o# high retrns to capital is that the company shold ha"e less
le"erage on its !alance sheet' This scenario is an atomatic reslt o# high retrn on
capital' I# yo ha"e high retrns on capital, the !siness +old atomatically generate
high cash #lo+ and as a reslt o# that yo +old ha"e lo+er le"erage'
In case o# the @alitati"e parameters, +e tend to look at the management @ality' ;e
also look at a company<s !siness model and the competiti"e ad"antages that it
possesses'
=oreo"er, +e ha"e a #e+ set parameters that help s distingish the @ality
management sch as related party transactions and the acconting policies and le"el o#
disclosres in annal reports'
9inally, the most important #actor is "alations o# a company' 1alations are not ,st
nm!ers !t also ha"e to !e looked at #rom the prism o# @ality and potential gro+th'
3ro+th, +hich is sstaina!le o"er the long%term and not ,st an e*trapolation o# +hat
has !een achie"ed in recent years' 2ompanies that don<t meet or stock selection
principles are atomatically a"oided' ;e don<t ha"e any particlar sector pre#erence as
sch' -r +hole approach is completely !ottom%p stock selection #or the mid%cap
#nds'
'ow important is it for !ou to go and meet the compan! management%
=eeting company management is an important component o# the research process, !t
it is not the only one' ;e #eel management meets are a great tool to nderstand !siness
nances, indstry dynamics and key aspects o# the company<s !siness model and its
reported #inancial nm!ers' ;e !elie"e that #orming an opinion a!ot a company solely
#rom meetings +ithot analysing the history can !e misleading' So once again, +e take
stock o# the annal reports, +hat the management has said in the past, a!ot its #tre
plans and ho+ +ell ha"e they e*ected those plans, etc'
;e ha"e an 11%mem!er e@ity #nd management team at RI0=2' This ena!les s to
e*ecte the rigoros in"estment process and also ena!les #re@ent interactions +ith
companies' 4ast year, +e almost had a 1,000 toch points +ith "arios company
managements across the entire team'
So it<s not that +e don<t think management meets are not important !t +hat +e think
is that ,dging a company #rom ,st sch meetings is not the correct +ay #or in"estment
decisions' ;here these meets help yo is that they either rein#orce or +eaken yor
in"estment argment on a #actal !asis rather than getting opinions #rom the
management'
#hat advice would !ou give to an investor% Should the! invest in the mid(
and small(cap space right now%
I +old say that #or an in"estor +ho +ants to in"est in e@ity, the in"estment in case o#
mid%caps is al+ays a!ot asset allocation' I# yo +ere in"esting in e@ity, yo +old
enter into the asset +ith the e*pectation that o"er a long period o# time this asset class
shold deli"er retrns in line +ith the nominal 3D5 gro+th rate' 7o+ +ithin e@ity,
depending on the in"estor<s risk appetite one tends to allocate some portion in the mid%
caps and some in large%caps' I# he is a yong in"estor, he +old in"est in mid%caps more
aggressi"ely than large%caps as compared to an in"estor +ho is close to the end o# his
earnings cycle'
The crrent scenario especially #rom the markets point o# "ie+ is that +e are trading at a
"alation +hich is slightly !elo+ the long%term a"erages on a one year #or+ard !asis' In
#act, +e +old !e closer to 10 per cent discont to long%term a"erages and the mid%cap
a"erages are trading at a discont to large%caps +hich are similar to their respecti"e
long%term a"erages' So in that sense, mid%caps are also as attracti"e as large%caps' I
+old say that in"estment in this particlar segment o# the market shold al+ays !e
"ie+ed #rom an asset allocation point o# "ie+ and not !e sed to play the market #rom a
!eta point o# "ie+'
Learning
Di##erent types o# sa"ings !ank acconts
(ou pro!a!l% have a savings !ank account, !ut chances are %ou have not
given much thought to the impact !anking has on %our finances
By Research Desk | Sep 8, 2013
Being kno+ledgea!le a!ot di##erent types o# sa"ings !ank acconts can sa"e yo
money' ItAs hard to get !y +ithot a !ank accont these days' Banks are essential to
making the economy +ork' Banks o##er loans that yo can se to !y a hose or a car,
they isse de!it cards that yo can se to !y goods yo +ant to !y' >o may not ha"e
realised, thogh, that yo can also sa"e money !y !anking smartly'
There are se"eral types o# !ank acconts that yo can opt #or depending on yor needsE
#or instance, a !sinessman +ill pre#er a crrent accont compared to a salaried
indi"idal +ho +ill need a sa"ings !ank accont'
Savings )an$ &ccount
Sa"ings !ank acconts are meant to promote the ha!it o# sa"ing among people +hile
allo+ing them to se their #nds +hen re@ired' The main ad"antage o# a sa"ings !ank
accont is its high li@idity, sa#ety and a moderate interest on the sa"ings'
Capital *rotection
The capital in a sa"ings !ank accont is not completely sa#e' Balance in the accont
inclding interest earned, is insred p to a ma*imm o# Rs 1 lakh' This sm is insred
!y the Deposit Insrance and 2redit 3arantee 2orporation /DI2326 #or all commercial
!anks, inclding the !ranches o# #oreign !anks #nctioning in India, local area !anks
and regional rral !anks' In case o# co%operati"e !anks, yo +ill need to check i# it is
co"ered nder the DI232 !ecase i# a !ank has not !een paying the premim #or the
insrance scheme #or three consecti"e years, it ceases to !e insred'
Investment +,ective and Ris$s
The sa"ings !ank accont is the traditional home #or cash sa"ings' Today, a sa"ings !ank
accont is a necessity and is an essential component o# an indi"idalAs #inances' The
most important reason to open an accont is the atomatic access that it o##ers to other
#inancial instrments sch as in"estments, loans and sa"ings' The sa"ings !ank accont
o##ers se"eral other #acilities and #eatres that one shold e*plore to make optimm se
o# cash #lo+s'
Inflation *rotection
0 sa"ings !ank accont does not pro"ide protection against in#lation, +hich means
+hene"er in#lation is a!o"e the rate that a sa"ings !ank accont earnsE the accont
earns no real retrns'
Guarantees
The interest rate in a sa"ings !ank is garanteed p to the #irst Rs 1 lakh !alance in the
accont' This rate "aries across !anks since the Reser"e Bank o# India dereglated the
sa"ings !ank deposit interest rate on -cto!er 2), 2011' Banks are no+ #ree to determine
the interest on the !alance in a sa"ings !ank accont, +hich has to !e ni#orm #or all
types o# acconts p to Rs 1 lakh in an accont !t "aries #or acconts +ith a higher
!alance'
-i.uidit!
The sa"ings !ank accont is highly li@id and one can +ithdra+ cash #rom oneAs accont
#rom the !ranch dring the !anking hors' Today, the 0T= allo+s 28%hor +ithdra+als
+ithin limits in a single day +hich "aries across !anks and also depending on the
accont type' ;hen settling payments throgh real time gross settlement /RT3S6
#eatreE transactions are possi!le #rom &'00 0= to 8'30 5= on +eekdays and #rom &'00
0= to 1'30 5= on Satrdays #or real time settlement'
/0it +ption
>o can close the !ank accont on any day +ithin the !anking hors'
+ther Ris$s
Balance, inclding interest in an accont a!o"e Rs 1 lakh, is e*posed to the risk o# a !ank
#olding p' 7one o# the p!lic sector !anks ha"e #olded p in India, +hich is not the case
#or co%operati"e !anks' =ake sre yo are choosing a !ank +hich has strong credentials
and is sa#e'
Credit Rating
-pening a sa"ings !ank accont does not entail credit rating'
1a0 Implications
Interest earned in the sa"ings !ank accont p to Rs 10,000 per annm is ta* e*empt
#rom 2012%13' Interest amont a!o"e this limit is treated as income and ta*ed
accordingly' The interest earned is ta*a!le nder the head AIncome #rom other sorcesA'
Going +nline
It goes !y many names, sch asC online !anking, Internet !anking, 52 !anking, home
!anking, and electronic !anking' =ost allo+ yo to access yor accont online +hich is
con"enient and yo can control yor accont #rom any+here' -nline !anking permits
yo to pay !ills online, trans#er money !et+een acconts, online shopping, and access
accont in#ormation at any time and manage di##erent types o# acconts +ith a
particlar !ank'
-nline !anking opens a ne+ +indo+ to yor #inancesE yo can in"est in stocks, !y
insrance, pay rene+al premims, and recharge yor mo!ile phone, pay credit card !ills
and e"en pay ta*es depending on the #acilities o##ered !y yor !ank'
Is online an$ing safe%
-nline !anking takes secrity "ery seriosly and ses encryption technology to protect
accont holders #rom hackers and other secrity risks' ?o+e"er, yo shold not take the
!ankAs +ord #or it !lindlyE e*plore yor !ankAs +e!site and look #or the secrity
pro"isions it o##ers' -nline !anking +orks on pass+ords and the ons o# sa#ety partly
rests +ith yo'
Is online an$ing for !ou%
ItAs most !ene#icial i#C
F >o are +ired +ith online access
F >o make a lot o# !ill payments each monthE online !anking can sa"e yo time +riting
ot che@es and associated costs
F >o can track yor e*penses and manage yor #inances e##iciently
)an$ing on the move
The ad"ent o# mo!ile telephony has toched or li"es like ne"er !e#ore' Today, !anks
are making it easier than e"er #or accont holders to access accont in#ormation on their
mo!ile de"ices' Some !anks are o##ering ne+ ser"ices or impro"ing e*isting ones that
allo+ people to access their acconts +hile on the go'
>o access yor !ank accont throgh yor registered mo!ile phone +ith yor !ank'
The #eatres o##ered in mo!ile !anking are o# t+o typesE one%+ay, +here yor !ank
sends yo mo!ile pdatesE the other +hich is a t+o%+ay ser"ice +here yo send a
re@est, +hich the !ank ackno+ledges'
;ith e"ol"ing technology and impro"ing mo!ile handsets, !anks are creating so#t+are
#or mo!ile !anking inter#ace, opening yet another +indo+ to !anking' ;ith inter%!ank
mo!ile payment ser"ices /I=5S6, yo can trans#er #nds #rom yor accont to another
accont sing yor mo!ile phone i# the accont +here money is !eing trans#erred is also
I=5S ena!led' 2rrently, I=5S transaction is limited to Rs )0,000 per day per accont'
Various t!pes of Savings )an$ &ccount on +ffer
No Frills account is aimed at those +ith limited cash#lo+s' This accont allo+s yo to
!ank +ith a :ero minimm !alance and has a stiplated minimm or a"erage !alance'
I# the !alance in this accont e*ceeds Rs )0,000 or i# the cmlati"e "ale o# credit
transactions e*ceeds Rs 1 lakh in any #inancial year, the accont +ill no longer !e
treated as A7o 9rillsA' The accont +ill !e re@ired to satis#y the conditions and criteria
applica!le #or a reglar sa"ings accont and !e s!,ect to rele"ant charges'
Salar! &ccount o##ered to all salaried employees o# companies !anking +ith a
particlar !ank' The accont comes +ith concessions on maintaining minimm !alance,
nm!er o# +ithdra+als, additional che@e !ook #acility and other #eatres inclding #ree
0T= cm de!it card in most instances' -ne can isse mlti%city che@es at no
additional costs'
Sweep(in or Multiplier &ccount pro"ides the li@idity o# a sa"ings accont copled
+ith high interest earnings o# a #i*ed deposit +hich is achie"ed throgh a #i*ed%deposit
linked to the sa"ings accont' The !alance in this accont is ne"er idle' 9i*ed deposit/s6
#rom the srpls #nds in yor sa"ings !ank accont s!,ect to a minimm !alance as
stiplated !y a !ank is created in mltiples o# sms stiplated !y the !ank #or tenre o#
one year or more as instrcted and pro"ides ma*imm retrns' The accont also
pro"ides ma*imm li@idity' 0ll linked #i*ed deposits are ena!led #or atomatic re"erse
s+eep in mltiples as stiplated !y the particlar !ank on a last%in%#irst%ot /4I9-6
!asis +hen the !alance in the sa"ings accont #alls !elo+ the speci#ied minimm sm'
This +ay the amont that is re"ersed earns interest rates applica!le #or the period that
the deposit +as held +ith the !ank' 9eatres "ary across !anks and also depend on the
!ankAs relationship +ith the corporate client' Ser"ice ta* at 12'36 per cent is applica!le
on #acilities o##ered +ith this accont'
Miscellaneous &ccounts cater to di##erent target grops !y !ndling #eatres likeC
5ri"ilege !ankingC o##ers additional ser"ices #or a #ee or on maintaining higher minimm
!alance
2hildrenAs 0ccontC targeted at children, they can operate this accont !ased on pre%set
conditions !y the parent or gardian
0ccont #or ;omenC Targeted at +omen +ith special #eatres sch as pri"ilege cards
and special disconts
Senior 2iti:en 0ccontC 0imed at those a!o"e 60 years, the accont o##ers access to
special conters in the !ank !ranch !esides additional interest on deposits and lo+ or
no minimm !alance maintenance re@irements
'ow to open an &ccount
-nce yo ha"e selected the !ank to open an accont yo +ill need the #ollo+ing
docmentsC
F 0n accont opening #orm +hich the !ank +ill pro"ide
F T+o passport si:e photographs
F 0ddress and identity proo# sch as copy o# the passport, 507 /permanent accont
nm!er6 card or declaration in #orm 7o 60 or 61 as per the Income Ta* 0ct 1&61, dri"ing
license, "oterAs ID or ration card
F 2arry original identity proo# #or "eri#ication at the time o# accont opening
F These days, yo can also also open an online accont +ithot "isiting the !ank !ranch
'ow to operate an &ccount%
>o need a pay%in slip +ith the initial accont opening sm to !e credited into yor
accont' >o get a sa"ing !ank pass!ook +ith yor photo a##i*ed stating the nominee'
?o+e"er, some !anks, especially pri"ate and #oreign !anks do not isse a pass!ook and
instead deli"er an accont statement' The Sa"ings !ank rles can also !e read in the
pass!ook'
1!pes of 1ransactions
2ash, 2he@e, Demand dra#t, =oney trans#er and (2S
The ,oint accont holders can gi"e any o# the #ollo+ing mandates #or the disposal o#
!alance, +hich can !e modi#ied !y the consent o# all the accont holders'
F (ither or Sr"i"orC I# the accont is held !y t+o indi"idals say, 0 and B, the #inal
!alance along +ith applica!le interest +ill !e paid to the sr"i"or on death o# any one o#
the accont holders'
F 0nyone or Sr"i"or/s6C I# the accont is held !y more than t+o indi"idals say, 0, B
and 2, the #inal !alance along +ith interest, i# applica!le, +ill !e paid to the sr"i"or on
death o# any t+o accont holders'
*oints to *onder
F 5enalties +hen the !alance #alls !elo+ the minimm stiplated sm
F 5enalty +hen che@es are retrned
F 2ollection #acilities o##ered and applica!le charges
Details o# charges, i# any #or isse o# che@e !ooks and limits #i*ed on nm!er o#
+ithdra+als and cash dra+ings
Stockwire
Do+n, !t not ot
)ew stocks have witnessed e"cessive selling !ut ma% still offer a possi!le
opportunit% for investors
By Research Desk | 0g 30, 2013
=arkets, at least in the short%term, are anything !t rational' In"estors, or rather
speclators, go o"er!oard on !oth sides that is, either sending the share prices rocketing
or a!soltely crashing a stock' Bt these anomalies tend to e"en ot in the long%term as
long as the #ndamentals o# a company are intact'
;e ha"e a #e+ sch instances +hich ha"e
+itnessed e*cessi"e selling !t may still o##er a possi!le opportnity #or in"estors to
enter the stock'
1ata Coffee
The company is the largest co##ee prodcer and e*porter o# India'
2rrent priceC R&3&
)2%+eek high priceC R1,6.)
)2%+eek lo+ priceC R$$0
Discont to )%year 5( /in G6C 1)
Reasons for Fall
* The company #aced slo+do+n in 9>13 de to a #all in e*ports cased !y +eak glo!al
prices
* 2o##ee e*ports o# the company +ere 8,$31 tonnes in 9>13 as compared to ),.3) tonnes
in 9>12
* India<s co##ee e*ports #ell !y 8'8) per cent in the #irst 6 months o# the crrent calendar
year
Reasons to )u!
* 2o##ee prices are e*pected to increase in the second hal# o# the year de to short
spply' 1ietnam, a ma,or spplier o# ro!sta co##ee, is #acing droght and prodction is
pro,ected to !e lo+' =oreo"er, the Roya attack on co##ee trees in the 2entral 0merican
region +ill also hamper spply
* Tata co##ee e*ports primarily ro!sta green !eans and instant co##ee' There is an
increasing demand #or instant co##ee, o# +hich ro!sta !eans are a large component
1itan Industries
Titan is India<s largest player in the organised ,e+ellery sector and $0 per cent o# its
re"enes are deri"ed #rom this segment' It is also a leading player in the +atches and
eye+ear segment'
2rrent priceC R212
)2%+eek high priceC R313
)2%+eek lo+ priceC R200
Discont to )%year 5( /in G6C 1.
Reasons for Fall
* Increase in the import dty to $ per cent
* The changes in gold importing norms dictate that all imports +ill ha"e to !e made on a
cash margin
* 7o credit +ill !e allo+ed #or importing gold #or domestic se' This +old increase
costs #or importing #or the company' The changes came de to a high demand #or gold
+hich +as ad"ersely a##ecting India<s crrent accont de#icit
Reasons to )u!
* Thogh the ne+ reglatory measres +ill hamper gro+th slightly, !lk o# the costs
+old e"entally !e passed on to the cstomers
* Titan has sho+n the a!ility to gro+ #ast o"er the past years and the #tre o# !randed
gold ,e+ellery still seems attracti"e
* The gold story o# India has !een the same #or ages and no matter +hat the price, gold
is still percei"ed as a sa#e ha"en #or any and all contingencies
* The company has !een trying to increase the share o# diamond ,e+ellery as it has
higher margins than gold and cold help it sstain momentm
&pollo 1!res
;ith e*ports to o"er 11$ contries, 0pollo Tyres is one o# the largest tyre man#actrer
in India'
2rrent priceC R62
)2%+eek high priceC R102
)2%+eek lo+ priceC R2,1&0
Discont to )%year 5( /in G6C 2)
Reasons for Fall
* The company ac@ired DS !ased 2ooper Tyres in a H2') !illion deal
* The large de!t taken p #or the deal cased the share price to crm!le' In"estors #elt
that the ac@isition may not pay o## as +as in the case o# Tata Steel, +hich is still
strggling to cope +ith the montain o# de!t it took to ac@ire 2ors 3rop !ack in
2006
Reasons to )u!
* 7ot only the am!itios ac@isition +old make the com!ined entity the se"enth%
largest tyre man#actrer in the +orld, it +old also gi"e the company a +ider range o#
prodcts in the replacements market and +old psh its prodcts in di##erent
geographies
* The glo!al replacement market took a dip in 2012 !t is e*pected to gro+ this year and
+ith more strength in de"eloping markets
* 7o+ e"en thogh 0pollo Tyres +ill ha"e greater reach, there are concerns that the
com!ined cash #lo+ #rom the companies +ill !e a!le to pay o## the interest costs !t not
pay o## the principal' It remains to !e seen +hether 0pollo Tyres can cope +ith the ne+
si:e and take ad"antage #rom the position
Infos!s
The company is one o# the #irst esta!lished and the second%largest IT company in the
contry' ItAs still !elo+ its median 5( and cold o##er opportnities #or in"estment'
2rrent priceC R3,120
)2%+eek high priceC R3,123
)2%+eek lo+ priceC R2,1&0
Discont to )%year 5( /in G6C 10
Reasons for Fall
* In#osys has !een #acing margin pressres o"er the past #e+ @arters
* 5ro!lems #or the company started +hen it re"amped its !siness model +ith the 3'0
strategy +hich meant #or it to pro"ide !siness trans#ormational soltions and not ,st
so#t+are ser"ices' This thogh came at the +rong time as +ith the #inancial crisis,
companies +ere more intent on sa"ing +hat they had than on #rther e*pansion
* The company +as also adamant to not chase lo+ margin contracts +hich at a time o#
+eak discretionary IT spends came to hit the company hard' Its ri"al, T2S, thogh did
e*actly the opposite and :oomed ahead
* The #inal stra+ +as dra+n +hen it missed its 2013 re"ene estimates and the share
price reacted +ith a 21 per cent crash
Reasons to )u!
* Thogh the stock price reco"ered slightly +ith 7arayan =rthy coming !ack on the
!oard, it is still trading at a 1) per cent discont to its )%year median 5( o# 20'. as +ell
as !elo+ the 5( o# its competitors sch as ?24 Technologies and T2S +hich are at
20')) and 28')$, respecti"ely
* In#osys has #aced pro!lems +ith its !siness model !t it seems to !e taking steps to
get !ack on track' 9or instance, the company hiked employee salaries recently to
impro"e morale, redce attrition and retain the !est talent
* 5ricing in#le*i!ility, +hich cased it to lose pro,ects to companies sch as ?24 and
T2S, is planned to !e recti#ied in the #tre
Stockwire
Do+n, !t not ot
)ew stocks have witnessed e"cessive selling !ut ma% still offer a possi!le
opportunit% for investors
By Research Desk | 0g 30, 2013
=arkets, at least in the short%term, are anything !t rational' In"estors, or rather
speclators, go o"er!oard on !oth sides that is, either sending the share prices rocketing
or a!soltely crashing a stock' Bt these anomalies tend to e"en ot in the long%term as
long as the #ndamentals o# a company are intact'
;e ha"e a #e+ sch instances +hich ha"e
+itnessed e*cessi"e selling !t may still o##er a possi!le opportnity #or in"estors to
enter the stock'
1ata Coffee
The company is the largest co##ee prodcer and e*porter o# India'
2rrent priceC R&3&
)2%+eek high priceC R1,6.)
)2%+eek lo+ priceC R$$0
Discont to )%year 5( /in G6C 1)
Reasons for Fall
* The company #aced slo+do+n in 9>13 de to a #all in e*ports cased !y +eak glo!al
prices
* 2o##ee e*ports o# the company +ere 8,$31 tonnes in 9>13 as compared to ),.3) tonnes
in 9>12
* India<s co##ee e*ports #ell !y 8'8) per cent in the #irst 6 months o# the crrent calendar
year
Reasons to )u!
* 2o##ee prices are e*pected to increase in the second hal# o# the year de to short
spply' 1ietnam, a ma,or spplier o# ro!sta co##ee, is #acing droght and prodction is
pro,ected to !e lo+' =oreo"er, the Roya attack on co##ee trees in the 2entral 0merican
region +ill also hamper spply
* Tata co##ee e*ports primarily ro!sta green !eans and instant co##ee' There is an
increasing demand #or instant co##ee, o# +hich ro!sta !eans are a large component
1itan Industries
Titan is India<s largest player in the organised ,e+ellery sector and $0 per cent o# its
re"enes are deri"ed #rom this segment' It is also a leading player in the +atches and
eye+ear segment'
2rrent priceC R212
)2%+eek high priceC R313
)2%+eek lo+ priceC R200
Discont to )%year 5( /in G6C 1.
Reasons for Fall
* Increase in the import dty to $ per cent
* The changes in gold importing norms dictate that all imports +ill ha"e to !e made on a
cash margin
* 7o credit +ill !e allo+ed #or importing gold #or domestic se' This +old increase
costs #or importing #or the company' The changes came de to a high demand #or gold
+hich +as ad"ersely a##ecting India<s crrent accont de#icit
Reasons to )u!
* Thogh the ne+ reglatory measres +ill hamper gro+th slightly, !lk o# the costs
+old e"entally !e passed on to the cstomers
* Titan has sho+n the a!ility to gro+ #ast o"er the past years and the #tre o# !randed
gold ,e+ellery still seems attracti"e
* The gold story o# India has !een the same #or ages and no matter +hat the price, gold
is still percei"ed as a sa#e ha"en #or any and all contingencies
* The company has !een trying to increase the share o# diamond ,e+ellery as it has
higher margins than gold and cold help it sstain momentm
&pollo 1!res
;ith e*ports to o"er 11$ contries, 0pollo Tyres is one o# the largest tyre man#actrer
in India'
2rrent priceC R62
)2%+eek high priceC R102
)2%+eek lo+ priceC R2,1&0
Discont to )%year 5( /in G6C 2)
Reasons for Fall
* The company ac@ired DS !ased 2ooper Tyres in a H2') !illion deal
* The large de!t taken p #or the deal cased the share price to crm!le' In"estors #elt
that the ac@isition may not pay o## as +as in the case o# Tata Steel, +hich is still
strggling to cope +ith the montain o# de!t it took to ac@ire 2ors 3rop !ack in
2006
Reasons to )u!
* 7ot only the am!itios ac@isition +old make the com!ined entity the se"enth%
largest tyre man#actrer in the +orld, it +old also gi"e the company a +ider range o#
prodcts in the replacements market and +old psh its prodcts in di##erent
geographies
* The glo!al replacement market took a dip in 2012 !t is e*pected to gro+ this year and
+ith more strength in de"eloping markets
* 7o+ e"en thogh 0pollo Tyres +ill ha"e greater reach, there are concerns that the
com!ined cash #lo+ #rom the companies +ill !e a!le to pay o## the interest costs !t not
pay o## the principal' It remains to !e seen +hether 0pollo Tyres can cope +ith the ne+
si:e and take ad"antage #rom the position
Infos!s
The company is one o# the #irst esta!lished and the second%largest IT company in the
contry' ItAs still !elo+ its median 5( and cold o##er opportnities #or in"estment'
2rrent priceC R3,120
)2%+eek high priceC R3,123
)2%+eek lo+ priceC R2,1&0
Discont to )%year 5( /in G6C 10
Reasons for Fall
* In#osys has !een #acing margin pressres o"er the past #e+ @arters
* 5ro!lems #or the company started +hen it re"amped its !siness model +ith the 3'0
strategy +hich meant #or it to pro"ide !siness trans#ormational soltions and not ,st
so#t+are ser"ices' This thogh came at the +rong time as +ith the #inancial crisis,
companies +ere more intent on sa"ing +hat they had than on #rther e*pansion
* The company +as also adamant to not chase lo+ margin contracts +hich at a time o#
+eak discretionary IT spends came to hit the company hard' Its ri"al, T2S, thogh did
e*actly the opposite and :oomed ahead
* The #inal stra+ +as dra+n +hen it missed its 2013 re"ene estimates and the share
price reacted +ith a 21 per cent crash
Reasons to )u!
* Thogh the stock price reco"ered slightly +ith 7arayan =rthy coming !ack on the
!oard, it is still trading at a 1) per cent discont to its )%year median 5( o# 20'. as +ell
as !elo+ the 5( o# its competitors sch as ?24 Technologies and T2S +hich are at
20')) and 28')$, respecti"ely
* In#osys has #aced pro!lems +ith its !siness model !t it seems to !e taking steps to
get !ack on track' 9or instance, the company hiked employee salaries recently to
impro"e morale, redce attrition and retain the !est talent
* 5ricing in#le*i!ility, +hich cased it to lose pro,ects to companies sch as ?24 and
T2S, is planned to !e recti#ied in the #tre